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Tough Times for Ronald in Russia

I was once told a story by an American who found himself working in Russia in the early 1990s. He had met a fellow American who was involved with the opening of McDonald’s in Moscow, and the latter was finding things rather frustrating, particularly when trying to introduce western standards of customer service to the staff. Apparently, he told one of the Russia servers to greet the customers and offer a smile, which prompted the following response:

“Why? We’re the ones with all the burgers.”

It seems that almost 25 years later some Russians still haven’t worked out the basic relationship between business and customer as far as McDonald’s is concerned:

Russia’s consumer watchdog has announced unscheduled checks on McDonald’s restaurants across Russia as part of a probe into food standards.

The move comes after watchdog Rospotrebnadzor temporarily shut four McDonald’s restaurants in Moscow.

The actions come amid rising tensions and sanctions between Russia and the West over the crisis in the Ukraine.

The regulator denied the checks were politically motivated. McDonald’s said “top quality” food was its priority.

The regulatory agency said: “There are complaints about the quality and safety of the products in fast food restaurant chain McDonald’s.”

BBC Moscow correspondent Steve Rosenberg said: “The suspicion is that because McDonald’s is one of the symbols of America, that’s why it’s encountering problems now.”

Russian MPs have also called for checks on other US fast-food brands, including Burger King and KFC, he said.

“It does seem, if not the public, then the people in power, are losing their appetite for American fast food,” he added.

The primary beneficiary of McDonald’s in Russia are those Russians wishing to purchase its products, who number in the millions. (This point was driven home to me once when somebody in Sakhalin asked me, in all seriousness, to bring him a Big Mac meal from Moscow when I returned from a business trip. The flight is 9 hours.)

The secondary beneficiary of McDonald’s in Russia are the Russian owners (it is a franchise), managers, employees, and suppliers whose income derives from its operations. As somebody with a greater grasp of economics than a Russian policymaker points out:

“It’s an extraordinary decision, because McDonald’s is the great symbol of the West, but at the same time they’ve set up the most extraordinary network of suppliers in Russia to keep the whole system going.

“There are now something like 300 McDonald’s across the country, and they’ve got an enormous network of people providing them with potatoes, and beef, and everything that goes into the product… In fact, it’s going to hit an enormous number of people inside Russia.”

I am quite certain that those who have ordered these closures have no idea of the impact that this will have on ordinary Russians (and even if they did, they wouldn’t care) and genuinely think that Americans are making billions of dollars as the only beneficiaries of McDonald’s operations in Russia.

McDonald’s are cheap, have large amounts of seating, air conditioning, free WiFi, and the nobody minds if you grab a table, sit down and hang out for a while. Places in Moscow for which all these things are true are surprisingly few. As a consequence, McDonald’s restaurants in Moscow are in my experience almost always completely packed, mostly with people under age 25. (This is true of McDonald’s in Paris, too, I suspect for much the same reasons). These people will no doubt be annoyed if the Russian government shuts them down. The Russian government is unlikely to give a shit, though.

Yes, the Russian McDonald’s network is rightly famous for leading the way and showing Russians how to build domestic supply chains. One has to be willingly blind and deaf not to notice that. Let’s see if more than 1-2% of the 300 joints will be closed – whether it’s merely a silly anti-US gesture or much worse.

“McDonald’s are cheap, have large amounts of seating, air conditioning, free WiFi, and the nobody minds if you grab a table, sit down and hang out for a while.”

This.
And in France, they have another advantage: they’re actually open for business outside the slim eating windows which ‘normal’ restaurants operate. I’ve lost count of the number of times we’ve been out skiing or beaching and needed to grab a bite at 11pm or 4pm. McDo fills that niche quite efficiently.

It’s great value for the money – the coffee at the McD next to my office building in Moscow is every bit as good and possibly better than at the Starbucks next door, for a fraction of the Starbucks price.

Yes, the Russian McDonald’s network is rightly famous for leading the way and showing Russians how to build domestic supply chains. One has to be willingly blind and deaf not to notice that.

Indeed, and this is especially impressive when you consider how mind-bogglingly difficult it is to put in place reliable supply chains in Russia. I am sure that the reason Yuzhno-Sakhalinsk doesn’t have a McDonalds, and dumps like Nizhnekamsk does, is because of supply chain issues. Sakhalin was just too remote – not in the geographical sense, but organizationally. Half the rules in place there appeared to be made up on the spot, and importing stuff was a nightmare.

“ordinary Russians … genuinely think that Americans are making billions of dollars as the only beneficiaries of McDonald’s operations in Russia.”
Let’s be honest. That’s a widespread belief in the UK. Every item in the Golden Arches is flown in from the States. No doubt in black 747s. They do the chemtrailing on the return flight.

The smile thing you get in Germany. And the restaurant opening hours. Those latter in Italy too (only worse), sometimes with the smile thing thrown in for good measure. Then again, in Britain you get the smile and “have a nice day” as you get ripped off.

To be honest, it amazes me sometimes that Europe has a more functional economy than the former soviet union.